Company Overview
National Securities Depository Ltd. (NSDL), incorporated in 1996, is India’s first and largest securities depository and a SEBI-registered Market Infrastructure Institution (MII). The company played a pioneering role in the dematerialisation of securities in India. As of March 31, 2025, NSDL holds an ~86.8% share of the total value of dematerialised securities under custody and operates a network of 294 depository participants (DPs) across 65,391 service centres. It services over 3.95 crore active demat accounts, covering 99.34% of Indian pin codes and users from 194 countries.
Its subsidiaries include:
- NDML: Offers e-governance and regulatory technology platforms (SEZ Online, KRA, Insurance Repository, etc.).
- NPBL: Operates a Payments Bank with over 2.42 million active accounts and leads in AePS and micro-ATM transactions.
The company operates a robust and highly scalable depository infrastructure supporting diverse asset classes including equities, debt, mutual funds, REITs, InvITs, SGBs, T-bills, and more.
Promoters & Shareholding
NSDL is a professionally managed company with no identifiable promoter. The shareholding is entirely held by public institutions and financial entities. Post-issue, the public shareholding will increase significantly due to the Offer for Sale.
| Category | Pre-Issue | Post-Issue |
| Public Shareholding | 27.30% | 52.38% |
| Non-Public (Institutions) | 72.70% | 47.62% |
Public Issue Details
- Issue Size: ₹3,810 Cr – ₹4,011 Cr (Offer for Sale of 5.01 Cr shares)
- Price Band: ₹760 – ₹800 per share
- Face Value: ₹2 per share
- Minimum Lot Size: 18 shares (₹14,400 at upper band)
- Post-Issue Market Cap: ₹15,200 Cr – ₹16,000 Cr
- Listing: BSE
- Offer Period: July 30 – August 1, 2025
- BRLMs: Axis Capital, ICICI Securities, HSBC, SBI Capital, IDBI Capital, Motilal Oswal
Objects of the Offer
- 100% Offer for Sale by existing shareholders
- No fresh capital raised; proceeds go to selling shareholders
Key Strengths
- Market Leadership: 86.8% market share in value of dematerialised securities (vs. 13.2% for CDSL)
- Recurring Revenue Base: From issuer custody fees, DP maintenance fees, transaction fees, pledge/margin pledge, and digital LAS
- Tech-Driven Innovation: First to introduce T+0 settlements; blockchain-based security monitoring; digital platforms (CAS, IDeAS, SPEED-e)
- Diversified Offerings: Including KYC, insurance repository, digital lending, and mutual fund APIs through NDML and NPBL
- High Efficiency:
- Demat holding per account with NSDL is ₹11.8 Mn
- FY25 Operating Margin (EBITDA): 26.4%; PAT Margin: 24.2%
Risks
- 100% OFS; no fresh infusion of growth capital
- Regulatory dependence on SEBI, RBI, and MCA for business continuity
- Faces competition from CDSL, especially in retail penetration (CDSL has higher number of accounts)
- Concentrated revenue streams from market-related services susceptible to economic cycles
Industry Outlook
India’s capital market infrastructure has witnessed unprecedented growth in recent years, driven by favourable regulatory developments, increased retail investor participation, and rising digital adoption. Demat accounts in India have grown at a robust CAGR of 21.9% from 21.7 million in FY14 to 192.4 million in FY25, highlighting the vast untapped market potential in a country with over 1.44 billion population. Despite this growth, penetration remains modest at just 13.4% as of FY25, indicating a long runway ahead.
The Ministry of Corporate Affairs has mandated the dematerialisation of securities for unlisted public companies (2018) and most private companies (2023), further expanding the scope of depositories like NSDL. In parallel, rising IPO activity, compulsory KYC norms, and increasing financialisation of household savings are creating sustained demand for depository and ancillary services. The depository ecosystem is also benefiting from deepening of the bond market, higher compliance standards for issuers, and greater global participation via FPIs.
Globally, India is among the few markets to have implemented near-instantaneous settlement mechanisms such as T+1 and pilot T+0 settlement. These innovations have cemented India’s position as a leading financial market infrastructure hub. NSDL’s role in enabling such efficiencies through a robust digital architecture makes it a critical player in this transformation. Moreover, the shift towards integrated digital platforms for KYC, e-governance, insurance demat, mutual funds, and digital banking underscores the relevance of NSDL’s ecosystem going forward.
In this context, NSDL stands to benefit significantly from the structural tailwinds in the Indian capital markets. The compounding effect of increased transaction volumes, regulatory compliance, technology-led efficiencies, and deeper penetration across geographies makes the depository business a secular long-term growth opportunity.
Financial Snapshot (Consolidated, ₹ in Cr)
| Particulars | FY23 | FY24 | FY25 |
| Revenue from Ops | 1,021.99 | 1,268.24 | 1,420.15 |
| Revenue Growth (%) | – | 24.1% | 11.9% |
| EBITDA | 328.60 | 381.13 | 492.94 |
| EBITDA Margin (%) | 25.0% | 24.0% | 26.4% |
| PAT | 234.81 | 275.45 | 343.12 |
| PAT Margin (%) | 21.3% | 20.2% | 24.2% |
| EPS (in ₹) | 11.74 | 13.77 | 17.16 |
| ROE (%) | 16.4% | 16.4% | 17.1% |
| Net Worth | 1,428.86 | 1,684.10 | 2,005.34 |
Valuation:
- P/E Ratio (FY25): 46.6x at upper band
- Implied Post-Issue Market Cap: ₹16,000 Cr
- Return on Net Worth (RONW): 17.1%
Peer Comparison with CDSL:
| Metric | NSDL (FY25) | CDSL (FY25*) |
| Market Share (Value) | ~86.8% | ~13.2% |
| No. of DPs | 294 | 583 |
| Active Demat Accounts (Cr) | 3.95 | ~10.1 |
| Revenue (₹ Cr) | 1,420.15 | ~1,300 (est.) |
| PAT (₹ Cr) | 343.12 | ~310 (est.) |
| P/E Ratio | 46.6x | ~52–55x |
Recommendation
NSDL is a mission-critical financial infrastructure player with strong industry positioning, robust margins, steady cash flows, and a diversified business through its tech-led subsidiaries. While Central Depository Services Ltd. (CDSL) may lead in account volumes, NSDL retains dominance in value of assets and institutional scale. Compared to CDSL, NSDL demonstrates superior capital efficiency and technological capabilities, while being attractively priced with a lower P/E multiple.
Despite being a pure OFS, the IPO offers exposure to a rare asset in India’s capital market ecosystem.
Recommendation: “Subscribe for Long-Term Investment”
Valuations are fair considering market leadership, growth runway from rising financialisation, and stable profitability. Suitable for investors seeking core exposure to India’s capital market infrastructure.
Disclaimer:
This article should not be construed as investment advice, please consult your Investment Adviser before making any sound investment decision.
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